Understanding Variable Dearness Allowance (VDA) Impact on Basic Salary and Employer Compliance

ravendra05
What will happen if a company merges VDA into basic salary.

Ravendra
Madhu.T.K
VDA refers to Variable Dearness Allowance, which by its nature should vary according to changes in the cost of living index. Therefore, if it is merged with the Basic salary, you will find it difficult to make changes. However, if your goal is to obtain a gross salary without a breakup into basic and VDA, you can do so because an employer is not bound to have a salary breakup, provided the total salary paid is not less than the minimum wages, including VDA.

Regards,
Madhu.T.K
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